Correlation Between Qbe Insurance and Centuria Capital
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Centuria Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Qbe Insurance and Centuria Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qbe Insurance Group and Centuria Capital, you can compare the effects of market volatilities on Qbe Insurance and Centuria Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Qbe Insurance with a short position of Centuria Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Centuria Capital.
Diversification Opportunities for Qbe Insurance and Centuria Capital
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qbe and Centuria is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Centuria Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Capital and Qbe Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Qbe Insurance Group are associated (or correlated) with Centuria Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Capital has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Centuria Capital go up and down completely randomly.
Pair Corralation between Qbe Insurance and Centuria Capital
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.62 times more return on investment than Centuria Capital. However, Qbe Insurance Group is 1.61 times less risky than Centuria Capital. It trades about 0.13 of its potential returns per unit of risk. Centuria Capital is currently generating about 0.07 per unit of risk. If you would invest 1,388 in Qbe Insurance Group on September 4, 2024 and sell it today you would earn a total of 636.00 from holding Qbe Insurance Group or generate 45.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Centuria Capital
Performance |
| Timeline |
| Qbe Insurance Group |
| Centuria Capital |
Qbe Insurance and Centuria Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Centuria Capital
The main advantage of trading using opposite Qbe Insurance and Centuria Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Centuria Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Centuria Capital will offset losses from the drop in Centuria Capital's long position.| Qbe Insurance vs. Aneka Tambang Tbk | Qbe Insurance vs. Commonwealth Bank | Qbe Insurance vs. Commonwealth Bank of | Qbe Insurance vs. Australia and New |
| Centuria Capital vs. Health and Plant | Centuria Capital vs. Sonic Healthcare | Centuria Capital vs. Medical Developments International | Centuria Capital vs. Regis Healthcare |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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